Publication Date: August 2003
Publisher: Library of Congress. Congressional Research Service
Research Area: Banking and finance; Business
In late 2000, the Federal Reserve and the Treasury proposed to use their authority to increase banking powers. The regulators proposed allowing banking companies to engage in real estate brokerage and management, as activities that are financial in nature. Their proposal has been controversial, pitting real estate companies against banks. The substantiative issues are two: those that question the respective nature of banking and of real estate activities; and those that question what the impact on consumers will be.
Procedural questions involve the intent of the 106th Congress in the Gramm-LeachBliley Act, which delegated authority to the two agencies to issue new regulations of this kind. A reintroduced the Community Choice in Real Estate Act, as H.R. 111/S. 98, would remove these real estate activities from consideration under the market-adaptive powers of the regulators. The House, via an amendment introduced by Representative Northup to the Treasury-Postal appropriations measure, H.R. 5120 of the 107th Congress, voted to block issuance of the proposed rule in fiscal year 2003.
As a result, the Treasury Department became forbidden to act upon its regulation until October 2003, when fiscal year 2004 begins. On July 11, 2003, Representative Northup reintroduced the amendment to be in effect in fiscal year 2004, which was approved by a Subcommittee, then the full Appropriations Committee on July 24. As Section 634 of H.R. 2989, the amendment would extend the current ban until Sept. 30, 2004, since it prohibits fiscal year 2004 funds from being used to implement the proposed rule. This report will be updated as events warrant.